HSBC, ING pilots blockchain Letter of Credit in India

ING Brussels and HSBC India ran a pilot transaction for a blockchain Letter of Credit (LC) transaction for a shipment between Reliance Industries and Tricon Energy. ING issued the LC for Tricon Energy and HSBC was the negotiating bank for Reliance, according to the Hindu BusinessLine.

The project digitizes the paperwork making the LC process faster and more efficient. Reliance Industries stated that it reduced the time involved to exchange trade documentation from 7-10 days down to a less than a day. It’s also integrated with the Bolero Network.

Hitendra Dave, Head-Global Banking and Markets, HSBC India said, “The use of blockchain is a significant step towards digitizing trade and enables greater transparency and enhanced security in addition to making it simpler and faster.”

Trade finance initiatives

Voltron is one of several global trade finance consortia. Another R3 consortium is Marco Polo which works with technology provider TradeIX to integrate with banking systems. we.trade currently focuses on helping European SMEs with open account trade finance. But it recently announced a deal to expand internationally when it signed a MoU with the new Hong Kong trade finance platform eTradeConnect.

ING is also involved with the komgo commodity trade finance platform which is initially focusing on energy. Multiple initiatives are looking at the commodity sector. Last week Singapore commodity company Agrocorp announced the launch of its own trade finance platform. And four of the agribusiness companies – Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus – are working together to digitize commodity trade. The latter is not a finance platform, but they plan to integrate with others that provide trade finance.

Trade finance company TradeShift is working on a novel blockchain platform to offer services to the 1.5m businesses already registered outside of blockchain. And in China there are numerous trade finance initiatives.